Bron Media Corp.’s financial problems are no joke.
The Vancouver film studio, which financed the film Joker, is tens of millions of dollars in debt to three different creditors.
It was ordered last October to repay US$11 million to Access Road Capital, LLC. The debt on that order continues to grow at $200,000 a month, according to a recent B.C. Appeals Court decision.
In March, a B.C. Supreme Court judge granted Access Road’s application to appoint a receiver over Bron if the studio didn’t pay its debts in full by May 1. According to the Appeals Court decision, Bron had only paid US$151,000.
However, another creditor, Creative Wealth Media Lending LP 2016, has stepped in to block the receivership.
The Appeals Court decision noted the outcome of the dispute “will affect Bron’s ability to continue as a going concern.”
“If a stay [of the receivership] is granted, the amounts payable under the consent judgment will grow, but Bron will have a further opportunity to meet its financial obligations to all stakeholders, including its secured creditors,” wrote Justice Leonard Marchand.
“If a stay is not granted, the receiver is likely to liquidate Bron’s assets in the hopes of satisfying amounts owing to all of Bron’s creditors, secured and unsecured.”
Bron’s finances were the subject of rumours last summer, as IndieWire the studio, launched in 2010 by husband and wife Aaron and Brenda Gilbert, could be “going down a similar path” to “big spenders” in the industry like Broad Green and Annapurna.
Specifically, the outlet reported Bron was looking to restructure and focus on its digital division, which works in digital animation.
Creative Wealth and Comerica Bank hold US$30 million and US$9.4 million respectively in secured debt against Bron, according to the Appeals Court, which granted an application by Creative Wealth for leave to appeal the receivership order.
Marchand said Creative Wealth “has an arguable case that the judge erred in principle.” In particular, the legal precedent used to justify the receivership order “was not made in favour of an unsecured creditor over the objection of two secured creditors.”
Access Road opposed the leave to appeal “because the outcome will be the same in any event.”
But Marchand disagreed with Access Road’s argument, noting the creditor hasn’t used “reasonably available legal avenues” to act on the October judgment – and because Creative Wealth and Comerica “have more at stake, have priority over Bron’s assets and have reason to believe that Bron can right its financial ship if given sufficient time.”
Marchand added there is “no evidence that Bron has sufficient assets to satisfy its secured creditors, never mind its unsecured creditors.”
“Given Bron’s inability to satisfy the consent judgment, if Bron is liquidated, CW faces a material prospect of non-recovery,” Marchand wrote.
